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The lottery-panel task for bi-dimensional parameter-free elicitation of risk attitudes

Author

Listed:
  • Aurora García-Gallego

    (GLOBE-Economics Dpt., U. Granada & LEE-Ec. Dpt., U. Jaume I (Spain))

  • Nikolaos Georgantzís

    (GLOBE-Economics Dpt., Universidad de Granada (Spain) & BELIS, Murat Sertel Center for Advanced Economic Studies, Istanbul Bilgi University (Turkey))

  • Ainhoa Jaramillo-Gutiérrez

    (Economics & Finance Dpt., Universidad Castilla la Mancha (Spain))

  • Melanie Parravano

    (LEE-Economics Dpt., Universitat Jaume I (Spain))

Abstract

We propose a simple task for the elicitation of risk attitudes, initially used in Sabater-Grande and Georgantzís (2002) [SGG], capturing two dimensions of individual decision making: subjects’ average willingness to choose risky projects and their sensitivity towards variations in the return to risk. We report results from a large dataset obtained from the test and discuss regularities and the desirability of its bi-dimensionality when used to explain behaviour in other contexts.

Suggested Citation

  • Aurora García-Gallego & Nikolaos Georgantzís & Ainhoa Jaramillo-Gutiérrez & Melanie Parravano, 2010. "The lottery-panel task for bi-dimensional parameter-free elicitation of risk attitudes," ThE Papers 10/12, Department of Economic Theory and Economic History of the University of Granada..
    • Handle: RePEc:gra:wpaper:10/12
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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers10_12.pdf
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    References listed on IDEAS

    as
    1. Glenn W Harrison & John A List & Charles Towe, 2007. "Naturally Occurring Preferences and Exogenous Laboratory Experiments: A Case Study of Risk Aversion," Econometrica, Econometric Society, vol. 75(2), pages 433-458, March.
    2. Aurora García-Gallego & Nikolaos Georgantzís & Pedro Pereira & José C. Pernías-Cerrillo, 2005. "Competing Against Simulated Equilibrium Price Dispersions: An Experiment On Internet-Assisted Search Markets," Working Papers 05-12, NET Institute.
    3. John D. Hey & Chris Orme, 2018. "Investigating Generalizations Of Expected Utility Theory Using Experimental Data," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 3, pages 63-98, World Scientific Publishing Co. Pte. Ltd..
    4. Sabater-Grande, Gerardo & Georgantzis, Nikolaos, 2002. "Accounting for risk aversion in repeated prisoners' dilemma games: an experimental test," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 37-50, May.
    5. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    6. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    7. Glenn Harrison & E. Rutström, 2009. "Expected utility theory and prospect theory: one wedding and a decent funeral," Experimental Economics, Springer;Economic Science Association, vol. 12(2), pages 133-158, June.
    8. Antoni Bosch-Domènech & Joaquim Silvestre, 2006. "Risk aversion and embedding bias," Economics Working Papers 934, Department of Economics and Business, Universitat Pompeu Fabra.
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    Citations

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    Cited by:

    1. Giuseppe Attanasi & Nikolaos Georgantzís & Valentina Rotondi & Daria Vigani, 2018. "Lottery- and survey-based risk attitudes linked through a multichoice elicitation task," Theory and Decision, Springer, vol. 84(3), pages 341-372, May.
    2. Paolo Crosetto & Antonio Filippin, 2013. "The “bomb” risk elicitation task," Journal of Risk and Uncertainty, Springer, vol. 47(1), pages 31-65, August.
    3. Annarita Colasante & Aurora García-Gallego & Andrea Morone & Tiziana Temerario, 2017. "The utopia of cooperation: does intra-group competition drive out free riding?," Working Papers 2017/08, Economics Department, Universitat Jaume I, Castellón (Spain).
    4. Omotuyole Isiaka Ambali & Francisco Jose Areal & Nikolaos Georgantzis, 2021. "Improved Rice Technology Adoption: The Role of Spatially-Dependent Risk Preference," Agriculture, MDPI, vol. 11(8), pages 1-13, July.
    5. Paolo Crosetto & Antonio Filippin, 2016. "A theoretical and experimental appraisal of four risk elicitation methods," Experimental Economics, Springer;Economic Science Association, vol. 19(3), pages 613-641, September.

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    Keywords

    Decision-making; Lotteries; Risk aversion;
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